The company is fully committed to in-house development and in-house production.

Volvo Cars has announced 700 million SEK (€68 million / $82 million) investment in its powertrain plant in Skövde, Sweden to establish complete in-house electric motor production by mid-decade.

Initially, the electric motors will be only assembled there, but at a later stage, the facility will be ready for the full manufacturing process for e-motors in-house.

The company is already designing and developing electric motors in Gothenburg, Sweden and Shanghai, China, where the company recently opened a new electric motor lab.

Moving everything in-house seems a natural consequence of Volvo's previous decision to switch to electric cars and achieve 50% BEV share out of total sales volume by 2025.

"Taking over the role of the internal combustion engine in car engineering, e-motors are a fundamental building block of electric cars, together with the battery and power electronics. The interplay between these three component areas is crucial in developing premium electric cars.

Bringing the development and production of e-motors in-house will allow Volvo Cars engineers to further optimise electric motors and the entire electric driveline in new Volvos. This approach will allow engineers to make further gains in terms of energy efficiency and overall performance."

Volvo Cars electric motor

The remaining activities at the Skövde internal combustion engine plant will be transferred to a separate subsidiary of Volvo Cars, named Powertrain Engineering Sweden (PES) and merged with Geely’s combustion engine operations.

We guess that this is the future of the internal combustion engine business, in general. Manufacturers will gradually move it the side. The plants, however, as in the case of Skövde (part of Volvo since the beginning in 1927), will transform.